By the end of 1960, and certainly by the beginning of 1961, the costs associated with the indiscriminate utilization of resources started to catch up with Cuba. In August, 1961 a National Production Conference was called to account for the massive shortages which were occurring with respect to almost all commodities.

Boorstein calls this period one in which there was “mounting pressure against resources.”

In part Cuba’s problems were due to the trade embargo imposed by the U.S., especially as the availability of spare parts previously supplied from that country became a major problem. In part difficulties arose because of problems associated with reorienting the country’s trade pattern from almost complete dependence on America to trade with the socialist bloc. Primarily however Cuba’s problems flowed from the fact that priorities among alternative uses to which scarce resources could be put had not been established. In the absence of such priorities shortages of even essential goods developed, but could not be rectified, because inputs were being used elsewhere, in less essential production.

In response to these conditions Cuban leaders increasingly recognized the need for careful and comprehensive planning, and for a general strategy for development in order to govern the pattern of resource allocation. It was in this context that the 1963 decision to concentrate again on sugar production was made. With foreign exchange extremely scarce and with alternative lucrative investment prospects large non-existent because, of the familiar Caribbean problems of scale and need for raw materials imports, it became obvious that it was only sugar which, at least in the short run of about ten to fifteen years, could be an important enough income earner to provide the resources necessary for diversification of the economy. Fortunately for Cuba, the Soviet Union saw its long-run economic and political interests in guaranteeing the Caribbean nation a market at a good price for its sugar, and as a consequence the strategy of concentrating on the production of the traditional crop in order to modernize the economy was adopted.

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